Developers and longtime computer users may be used to the shareware, time trial, pay-full-price-once-upgrade-cheaply-forever model of buying and selling software, but regular people, the mass market that Apple continues to court first and foremost, aren’t. Adding demos (“I thought this app was free, but now it’s telling me I have to pay to keep using it? What a ripoff!”) and paid upgrades (“Wait, I bought this app last year and now I have to pay again to keep using it? Screw that!”) would introduce a layer of confusion and make buying an app a more arduous process, which would result in people buying fewer apps.

At least, that’s the rationale behind Apple’s decision not to implement them. To be clear: what I just wrote is not my opinion of how things should be. This is only my guess at Apple’s reasoning.